Transcription
What do you think, why China doesn't allow, still doesn't allow Facebook, Google, New York Times, Instagram, and Wikipedia, for example, to to to just be allowed there? Thank you.
Uh, it's because we believe that each country should have the sovereignty to decide what kind of ideas dominate their society. I mean, we respect countries who don't believe that you can let any ideas in if you wish, but we don't. We believe speech is a form of act, and just like any other acts, need to be regulated. We respect countries who say speech should be completely free. You can say anything you want. That's okay if that's how you want to run your country. But we don't believe that. I don't need someone else to tell me who I should must invite into my house, into my living room. I don't like that. I don't think you like that either. I don't care what reason you give, what rationale you give, what moral lessons and lectures you're going to give. In my house, I decide purely on my discretion who can sit in my living room.
Uh, so Eric, welcome.
Thank you for the introduction. Um, uh, good morning or good afternoon. I'll be brief so we can go to lunch. Um, it's great to be in Croatia. I love it. Um, it it's the only country in the former Yugoslavia that I have not been to. This is my first time. Um, I remember many years ago, 20-some years ago, uh, in the late 1980s and early 1990s when I was still in Yugoslavia, I came as a student. I was studying the history of the Habsburg monarchy. Uh, so this was the frontier of the empire. Uh, I loved it so much then. Um, and and the place has changed so much. Of course, uh, borders have changed. Uh, identities have changed. Um, and, you know, I miss the old days, but I like the new days too. Uh, today, um, I have a big topic but a simple message. The big topic that the organizer assigned me is the state and future of globalization. Um, and the message is a simple one. Uh, I think you all know, I don't need me to tell you this. Uh, globalization is in trouble. It's in big trouble. Uh, if you don't know this, you're really out. Uh, and we're not going back. Uh, it's over. Uh, the the globalization as we know it. Uh, and here's why. Let me explain. Um, and and and the second message is, will globalization continue in some form and and how? Uh, and I think it will, and I think it should. Um, and if we do not foster a new kind of globalization, uh, the world will go backwards, and no one in the world would know better about what going backwards means than the people in this region. Uh, and I know the history. Um, so, um, globalization, that's a brief review of history, uh, started as a concept, as a very innocent concept in the 1970s. Uh, it simply meant that, uh, driven by economics, technology, and the movements of people, uh, there will be increasing interconnectedness or interconnectivity among peoples and nations of the world. Okay. So it's a really simple concept. It started in the 1970s. Uh, but it experienced a qualitative change in the early 1990s after the Cold War, at the end of the Cold War. Um, and and I like to make the distinction between globalization and globalism. And at the end of the Cold War, that was when globalism as an ideology was injected into globalization. And I call it hijacking globalization. Um, and the ideology of globalism was essentially based on the doctrine of neoliberalism, uh, and it manifested at a practical level through what was called the Washington Consensus. And at that time, uh, the US and its Western allies led a drive to universalize Western values, and those Western values had three components: politics, economics, and international relations. Uh, in in the political arena, it was to liberalize, it was to universalize the system, political system of liberal democracy. Economically, to universalize the economic system of market capitalism. In international relations, a set of institutions to manage the relations among nations, whether it's IMF or WTO or what have you. Okay. Um, and the idea was that we're going to an era where, uh, when universal standards based on Western values in political governance and economic management and international relations will spread the world over. So everybody would be would be doing things in the same way, by the same standards, around the world. Regardless of where you came from, what your culture is, what your political system is, everybody will be the same. Okay? And looking back in the last tw- over the 20-30 years, I must say that in one respect, globalism was a great success. I call it the great conversion. What was the great conversion? If you look at the numbers in the 1970s or 80s, uh, there were, I don't have the numbers in front of me, but you could, uh, search online. Okay. Uh, based on this, uh, rating of of Freedom House in America or the Wall Street Journal Heritage Foundation ranking of liberal economies or free economies, uh, you will see that in the 70s or 80s, before the end of the Cold War, there were only maybe 40 or 50 countries who were classified as liberal democracies and maybe a similar number as market economies. Now the number has doubled or tripled. Never in the history of mankind has so many countries given up whatever political system or economic system that they had and adopted something totally new. Okay. So that was a great success. But globalization, this globalization, globalism, globalization injected with globalism has also generated great failures. What are the failures? Let's look at the new countries that adopted the Washington Consensus, the neoliberal doctrine, uh, the the the the the 50 or 70 or 80 new countries. Yeah. Um, I group them into four groups mostly. First group, uh, I counted about 29 countries. Uh, those were the former Soviet states and former East European Warsaw Pact countries. Okay. And that's the most fortunate group. This group has done better than any other group. However, even among this particular group, there are probably fewer than half of the countries that you could say have truly achieved success. Most of the Caucasus, countries in the Caucasus and the Stan countries, so-called, um, are not successful. Um, Russia itself was not successful for a long time. Um, Ukraine being the worst, one of the worst. Um, and even in Eastern European countries, uh, if you look at Hungary, Poland, many of those countries are regretting many of the things they adopted, and they want to change, and they're fighting a battle to change, to regain their national sovereignty, and to regain their ability to to how to run their countries. Okay. So, so there's a lot of dissatisfaction, although this group has the highest number of success stories, you know, uh, uh, Croatia is one of them. Uh, Czech Republic, Poland seem very successful. Okay, but of that group, maybe only half are moderately successful. Um, second group are countries and regions that achieved developed country status under authoritarian, dictatorial political systems, and then they adopted the Washington Consensus, liberal democracy, and market economy after they got rich. Okay. And those places, for example, are like South Korea, Taiwan, South Africa, places like that. Yeah. Um, of those, the record was about 50/50 at best. South Korea continued to succeed. Taiwan has been deteriorating. South Africa has been deteriorating. Okay. Not doing so well, that group. Third group was the largest, the large number of developing countries from Southeast Asia to South America to Latin America to Africa. You cannot find one success story. That's the amazing thing. Virtually all of them are still lagging way behind on development, at poverty level. Those who are fighting civil wars are still fighting them, or at least in civil strife. Um, the the the globalism has not solved any of their problems and only made them worse. Okay. And the fourth group, I don't even, the latest group, latest addition to that column, of course, are the countries of the Arab Spring. Um, and I call it the Arab Winter. Um, you, we all know what happened to them. Okay? Not one came out ahead. Every single one of them came out behind, way behind. So, globalism in the developing country. And let's look at globalism in the developed world. It's doing even worse. Globalism led, globalization created tremendous economic benefits. We see that in the economic numbers, GDP, profits, what have you. Okay. For the developed countries, America and Western Europe. But the vast majority, the most of those benefits went to the very top. Okay? The middle class in all those developed countries has been collapsing. Uh, it's the amazing thing. If you compare China and America, for instance, uh, both countries benefited, uh, tremendously from globalization. Okay. Uh, if you look at GDP growth, um, uh, look at, uh, surpluses, they've all gained a large amount of wealth. But China's GDP grew 10x, maybe around. Okay. And China's median income grew about eight times. In America, America's GDP grew also tremendously, four or five times from a large, much larger base. Yet their median income has been dropping, stagnant, and dropping. Isn't that amazing? Where has the money gone? And if you go to Paris, go to the streets of Paris every weekend, you'll see them wearing these yellow vests, and they'll tell you where their money has gone. Okay? And if you go to even in Germany, uh, Germany is the most successful country in Europe, there's so much dissatisfaction. So, so we see a tremendous, uh, backlash against the elites who led this wave of globalization, or globalism, uh, and that's, I think, will only, um, uh, intensify and spread. Um, so what does that have to do with us? Um, China has been the only exception among just about any other, among all major countries in the world. China was the only one who engaged globalization and benefited from globalization the most. Yet it rejected globalism decisively. It said no to the political system of liberal democracy. It said no to market capitalism. It, it was pointedly not market capitalism. It's socialism with Chinese characteristics, which is fundamentally different.
>> Um, so—
>> But some form of market economy exists, but not capitalism. How do you distinguish them?
>> Oh, I, I distinguish them simply by saying that in a capitalist society, in a country of capitalism, capital is is an independent power. Capital can determine the future of a country. In China, in a socialist country, we have tremendous capital, great entrepreneurs, lots of wealth, but capital is beneath political authority. Our national political authority will never allow capital to determine the future of our country.
>> So you all right in America, the 100 wealthiest people in America will have an outsized influence on the future of of American political establishment and the direction of the country. Okay. In China, the wealthiest country, the the hundred or 500 wealthiest Chinese people, we have zero influence over our Politburo and our Central Committee. Zero. Okay. So, so that's the difference between a capitalist country and a socialist country. So, and the role of capital, of course, is borderless. Capital is not committed to the land. Capital is not committed to culture. Capital goes wherever it can make the most money. Um, so it's different, and that's why you see all this backlash in developed countries and developing countries alike, because people's lives, people want their lives taken care of. Uh, they don't want to just be be ruled by by by by by capital. Um, so, so, so China is the only country that's been successful in this globalization process. It's developed a tremendous economy, became the second largest economy by nominal terms and largest by PPP. Uh, it's now the the largest trading nation in the world by far, and the largest trading nation in history, by the way. Um, 100, I think 115 or 120 countries count China as their largest trading partner. Only 63 count the US as their largest trading partner. Um, so, so we've done this, uh, and we've lifted 800 million people out of poverty in the in the process, and we're continuing on that process. We're we're not there yet. Um, now something else is happening in the world. The United States and its Western allies, but the US is leading this, um, confronted with these problems of globalization, seems to have decided to lead an effort to deconstruct and destroy the institutions of globalism that it built. Okay. And that's unprecedented. It's never happened, sort of, in the history of conflicts. If you read Graham Allison's latest book about "Destined for War," and all those conflicts among great powers, I was talking to him. I said, "Have you, have you seen an instance like that like this?" He said, "No."
>> What is it?
>> The leading power, the incumbent leading power is dismantling the system it built by itself for its benefit. It wants to ditch it. Um, and of course, you have all those other countries, especially in Europe, that have built their systems based on the belief that that that the US-led system will continue forever, for another 2,000 years. You're in trouble. What are you going to do? Okay. So, so that's another, uh, uh, interesting and amazing thing, unprecedented thing that's happening in the world. Um, so what are we proposing? Um, we look at 16 plus one or 17 plus one, we look at Belt and Road Initiative. China, I think, is proposing a new form of globalization, a globalization that's liberated from the ideological shackles of liberalism, a globalization that's non-ideological, a globalization that allows the space for countries to develop their own paths, that does not seek to impose a set of political or economic values onto other countries. Uh, a globalization that respects national sovereignty. Um, it respects differences. A globalization of diversity or pluralism, I like to call it. Um, and and and President Xi Jinping used to say that that it's like a pair of shoes. Whether or not they fit, only you could tell when you walk. Um, so, so I think, you know, the Chinese approach is going to make a difference in the world, I hope. Um, and through the Belt and Road Initiative, through 17 plus 1, through other initiatives, uh, China's proposition, it's still a nascent proposition, it's a new proposition. There are going to be a lot of problems, a lot of issues, but it's a new idea that I think the world should entertain, which is that we would want to promote interconnectivity, promote globalization, but respect cultural and civilizational integrity, respect national sovereignty, and let each country discover and pursue through their own development paths. Thank you.
>> Thank you.
>> Uh, you mentioned countries like, uh, South Korea, Taiwan, that have, uh, gotten rich essentially during the the periods of dictatorships and then eventually have liberalized and became democratic. Uh, some have hoped in the West that this would happen with China. What, what do you have to say to to those, um, um, people with those aspirations?
>> Well, they did have those aspirations, but, but we didn't do it, and we came out ahead. So, I'm a venture capitalist. I look at results. Um, if you, you know, look at these other countries who liberalized, like I said, uh, I counted, you know, I use three examples, right? Countries or regions, uh, South Korea, Taiwan, and South Africa, maybe you can count some Latin American countries like that too, Chile or whatever. Uh, if you look at those countries, uh, I would say South Korea is the only real success story. After they liberalized, they continued to prosper and grow, you know, and the other countries among them, some of them really deteriorated badly, some of them just stagnant, not going anywhere.
>> Yeah, okay.
>> So, bad track record.
>> Bad track record. Do we have any, uh, questions from the audience before I, uh, continue with Eric? Okay, maybe then, Eric, how do you comment what's currently then you mentioned briefly that the US is, uh, in a pretty unprecedented way, dismantling the the system it, it, uh, helped build in the first place, and, uh, how do you feel that this trade war that is currently taking place will play out, and what will be China's, uh, reaction to it? I mean, um, we can't say we didn't see it, uh, coming eventually, especially from the American side. It, it feels now that there is a consensus both on the Republican as well as the Democrat side that, and that is very entrenched against China in a way. So even if the next president turns out to be from the Democrat side, I don't really feel that his or her, uh, view on China will will shift dramatically. So—
>> No, I, I think that's correct. I don't know how the trade war will play out. Uh, I'm not in the negotiating room. Um, um, but the trade war is needs to be understood in the context of a larger scale competition between these two countries. Um, and I think that will continue. Um, and I think there will be more competition, not just between China and US, but among many other countries like Russia, uh, Germany. Um, so, so, so, so we're in a, in a new era where somehow, I think Europeans in particular had this thought, I think it turned out to be an illusion, that somehow we're going to build this so-called liberal rules-based international order where everybody will operate under certain, as this set of rules, and and that it's, that's over. Now it's an era of everybody competes, everybody fights, and there's not going to be a set of rules that that that countries respect. Um, so we're going to see an era of hard power. Unfortunately, um, and not, not because of, I think, because of the failure of the soft power era. The soft power didn't deliver. These rules-based system didn't deliver for the for the people. Um, and unfortunately, I wish they had delivered, but it didn't. So, so we're in an era of hard power competition, and and Europe is in a very tricky position because Europe had not believed in hard power.
>> That is correct. I mean, Europe only recently started thinking about, uh, only after President Trump really forced Europe to think about their own defense budget and strategy did we really start considering it, uh, more seriously. But I mean, isn't this situation dramatically different from the one that we had during the Cold War when we had two superpowers? One was completely and practically wasn't really communicating with the world. Now we have, like, I mean, a marriage between, uh, two superpowers with interlinked supply chains, with interlinked economies. So, I mean, uh, this marriage cannot easily be, uh, broken, right?
>> It cannot be easily broken. Uh, but it could be damaged. Um, and and I think, uh, the US now is, I think the US, the current US leadership is wanting to draw down an iron curtain of some kind to to decouple with China, other economies too. Uh, because, and I, I don't blame them. I think the US has great advantage, great, uh, strength to compete and win, uh, in a, in a world of an era of what I call "waring states." That's a period in Chinese history where where everybody fights for its own interests. Okay? And China will fight for its interests too. Um, but, but, but I think that will be unsettling and risky period. Uh, I, I think we ought to be looking to reconstruct a more peaceful world order. Um, and I think China's proposal needs to be heard.
>> Mhm. And, um, paramount Chinese leader Deng Xiaoping once said that, you know, China should, uh, kind of lay low and bide their time. Essentially implying that China still has a lot to to catch up. Now, obviously, this was decades ago. In 2008, during the global financial crisis, many of the leaders of the West were traveling to Beijing in hopes that Beijing continues buying the, uh, government bonds of, you know, both the US as well as many European countries. Do you think China overplayed their hand by by by by being a little bit overconfident from the from interpreting the global financial crisis of '08 as a as a major decline of the West, especially of the US? So, in other words, like, what is the, is is China now a little bit surprised with all this backlash that's happening, especially coming from the US?
>> I think it's the opposite. I think China was too timid. I think China didn't realize the tremendous earthquake of the 2008 financial crisis. I think China didn't see how how fast the Western political institutions were decaying. How much incredible dissatisfaction there is in in developed countries. How how rapidly the social contract in America has been being torn apart. Um, China didn't realize that. Um, so I think China underplayed its hand instead of overplayed it. I think China should have been more forward in proposing its ideas to the world, how we should continue to interconnect.
>> Yeah. But from what you say, I, I get a feeling that, you know, um, uh, the West is kind of, uh, has the the political system to blame for the for the fact that it completely made the middle classes of the West miss out on the benefits of globalization. Now, if that is the case, then why are they so, um, angry at China and not at at their own political?
>> Yeah, I think the anger is misplaced. Um, like I say, if you look at the numbers, uh, the US and Western countries benefited just as much, if not more, than China. But it's the, the problems within those countries. The benefits only went to the very few, and a large number of people came out worse off, or stagnant. Uh, and most people feel less secure. Uh, most people feel they've lost control of their destiny to nameless, faceless global institutions like the EU, you know. Um, I mean, I was talking to a friend of mine about the Euro. Um, and he was an economist. Um, you're not in the Euro, I guess?
>> No, not yet. Not yet.
>> Not yet. Um, and we, the globalists don't understand there's something more important than money. All the globalists could see is money, money, money, money. And the economist, you know, gave me a list of the benefits of the Euro. Okay? Economic benefits. I said, well, look, that's all good, but, but I, I don't care. I would, I would not want to be a citizen of a country in which I take out my wallet, I take out my currency, and I don't see my hero, my national hero's picture on it.
>> Wow. Have you ever heard of venture capitalists talk this way about money? How do you get your investors to invest? I mean, with this kind of enlightened perspective.
>> No, I mean—
>> No, it was a joke.
>> So, so, so people are more complex than that. People, people need dignity. People need community. People need the sense of belonging. People need cultural integrity, civilizational integrity. Um, so I make a pitch: Don't join the Euro.
>> And but then what role do you think China has to play in in, uh, promoting, uh, uh, the the alternative form of globalization? Because if I understand you correctly, I mean, uh, the main message of China's, uh, uh, let's say, view of globalization is that, you know, the glob- the value system cannot be exported, and then every country should kind of—
>> Countries need to be able to develop in their own ways. Um, and and China wants to take its excess capital and its capacity to build that the Chinese have have learned one thing, one lesson in the last 40 years. It went from an agrarian poor country into a behemoth. And there's one lesson they learned. It's called, I heard it everywhere. I hear it, you know, people talk about in China: If you want to get rich, build a road.
>> Build a what?
>> A road.
>> A road.
>> Yes. Um, so infrastructure-led development, um, and infrastructure meaning not just physical infrastructure, but digital infrastructure as well, right?
>> Um, so, so China is trying to take that idea and say that, okay, we're going to take our excess capital, excess capacity to build infrastructure, be it in physical or digital, in countries that are connected to the Chinese economy. Um, so that we could increase interconnectivity this way between China's economy and their economies. Uh, that's what the Belt and Road is about. I mean, I remember five, six years ago, it started building. I was in Chongqing and saw the terminals, it was gigantic, and now it's straight to Madrid, to London. Okay. So along the route, obviously, it will improve trade, improve, uh, investment environments, and and bring pro- hopefully bring development, prosperity in those countries, and hopefully it'll come back and benefit China. Okay. But it's up to those countries to decide how they want to do it, and how they want to run their countries, how they want to run their politics and their economy. Um, and they could, for instance, Malaysia, you know, China had these big projects in Malaysia, big financing, big borrowing, and they changed government. President, Prime Minister Mahathir came to power, and he he said that some of those deals were not good deals for Malaysia. So they, but they re-negotiated. China cut the price by a third and and changed certain aspects of the the transaction, and they're back on track. So, so Chi- the Chinese are saying, you decide how you want to run your country, and you're a sovereign power. We're not going to impose our standards on you.
>> You've traveled to Africa a lot. You are on the on the board of, uh, China, you're a business school in, I think, Ghana, right? And, uh, China has had quite a significant interaction with many African countries. What have you seen there from your experience?
>> Uh, um, well, I mean, I think we've had a lot of successes there. We've also had a lot of problems. Um, Chinese companies, um, did not have a lot of experience expanding internationally. So they made mistakes, hire, didn't hire local people. So, so they're they're resolving, solving some of those problems. They're getting getting used to it. Um, but overall, I think, um, the, um, China's development projects in Africa have been successful. Uh, uh, I think the numbers I saw, don't quote me on it, you should you should double check that, the the the roads that we build in Africa in the last 20 years are more than all colonial powers in Africa combined did in the last 400 years.
>> Oh, that's impressive.
>> Number. Don't quote me on that.
>> Uh, at this point, I'd like to get the point. I get the point. Yeah. At this point, I'd like to open the floor again for for some, uh, questions from the audience. Uh, there's one over there.
>> My question would go on this globalization part. What do you think why China doesn't still doesn't allow Facebook, Google, New York Times, Instagram, and Wikipedia, for example, to to to just be allowed there? Thank you.
>> Uh, it's because we believe that each country should have the sovereignty to decide what kind of ideas dominate their society. I mean, we respect countries who don't believe that you can let any ideas in if you wish, but we don't. We believe speech is a form of act, and just like any other acts, need to be regulated. We respect countries who say speech should be completely free. You can say anything you want. That's okay if that's how you want to run your country. But we don't believe that.
>> Yes.
>> Okay. My name is Steven Bartulica. I teach, uh, political philosophy at a Catholic university here in Zagreb. Um, I enjoyed listening to your remarks and I would, um, agree with you on the Euro, for sure. I'm, I'm very, uh, skeptical about the wisdom behind this, uh, project, and it could lead to more fragmentation than unity, uh, among these countries, as Milton Friedman predicted, before it was introduced. So I think there's much that we should, uh, learn from these, uh, countries that are in the Eurozone. But I wanted to go to a more philosophical question. So, as you know, in 1989, the countries in Central and Eastern Europe, um, rose up against communism. Uh, you mentioned dignity and other things that you think should be respected, and the people in these countries, of course, felt that their dignity was not respected under these regimes, and they rose up. And many, of course, have not found their way, and of, and many, many of these places have maybe stagnated, and the elites have not found the proper model how to, uh, advance since the collapse of communism. But it is true that someone I admire greatly, John Paul II, uh, great gave the people of Poland and other, uh, countries great encouragement to, um, metaphorically take off the the chains that were keeping them down and to rise up and and demand their freedom and dignity. And it's interesting that since China's rise, I think the communists there have learned very much from this experience. So, uh, John Paul II badly wanted to visit China. He wasn't allowed, as you know. Pope Benedict, as well. But Western capitalists, bankers, uh, JP Morgan, uh, Goldman Sachs, Apple, they're all welcome in China. So, what does that tell us about, you know, this divide or how we see human nature? Uh, it seems that the communists in China have more in common with Western capitalists than they do with, uh, people running the Vatican. And I think that tells us a lot about what's at stake in this game that we're describing. So thank you very much.
>> Good question. Thank you. Um, I think you're right. Um, the, uh, the revolutions in 1989 and early 1990s, uh, were driven by genuine national aspirations for for the peoples of these countries to to to control their own destinies. Okay. And to use your quote of John Paul II, to to to liberate themselves from the shackles. Uh, unfortunately, they put on new shackles. The new shackles of liberalism. That was my point. The new shackles of globalism. Um, they went into a a new model without considering their own national conditions. Uh, that's why they're still in the wilderness. I think, um, I think we want, we, I mean, I like to see a more pluralistic world where countries are able to say, okay, don't impose your values on me. Let us consider our own national conditions. Let us consider our own cultural conditions, and we're going to find a way that's suitable for us. Um, and on the point of, uh, of capitalism and capitalists in China, of course, that, um, um, that's what we meant. We have a vibrant market economy. Uh, and China has decided to engage globalization in its own way, on its own terms. Uh, so we engage and let in what we believe benefits us. We keep out what we believe will harm us, like the this other gentleman, uh, raised.
>> So do, do the, is is really the the Holy Father such a threat to the regime that if he would visit China, they would feel that it could undermine their their authority, like, like it happened in Eastern Europe?
>> No, I'll be, I think, uh, uh, the the current Holy Father will be visiting China soon. Let's hope. I would like, but, but I will say that it's up to us to decide who can visit my house. I don't need someone else to tell me who I should must invite into my house, into my living room. I don't like that. I don't think you like that either. I don't care what reason you give, what rationale you give, what moral lessons and lectures you're going to give. In my house, I decide purely on my discretion who can sit in my living room.
>> system in terms of how does China ensure that capital doesn't affect the political system? Um, and also, what type of political systems do you see, um, developing in terms of, um, Europe and other Western countries? Because clearly this, this current political system, I'm not sure we'll be able to deal with the globalism that you've discussed or dismantling it, and there will be, um, a natural consequence of changing the political systems. So how do you see that developing?
>> I, I, I think, well, in China, obviously, it's a, it's a, it's a fact of the system that private capitalists are not involved in political decision-making. Uh, they allow the space to make money. Uh, and they, they, they probably allow the space to have some influence over policies that affect their industries. Maybe, maybe, uh, but not even that, uh, that the China's political system is completely independent. It's called political autonomy, um, independent of economic and capitalist interests. Um, there's corruption, of course, I give you that. Uh, but that's illegal. Um, and how I see, uh, political systems evolving in Western countries. Um, I think we're going to see more and more, um, democratic movements against liberalism. So liberal democracies breaking up inside the liberal and the democratic are increasingly at odds with each other, as, uh, Hungarian, Viktor Orbán said that they claimed that Hungary today is an illiberal democracy. Um, so, so we're going to see democratic forces saying that we want to take our country back from liberal orthodoxy. Um, I think that's, that's what we're going to see in, in the de- in developed countries, including in America.
>> To follow up on that, uh, note, if we do go down that road, right, where you see more, I mean, and you kind of already see it. I mean, we have the European Parliament elections coming up here, and, uh, in many countries in Europe, you, you see these, uh, populist movements rising, and they just haven't completely, uh, aimed their crosshairs at something. And then what you have is you have somebody like Steve Bannon, former advisor to President Trump, who comes to Europe and, and, uh, tries, tries to frame China as the problem that all these populist movements should focus on. The Yellow Vests, you mentioned, the Five Star Movement in Italy. I mean, isn't it the danger?
>> I think he's mistaken, and I think the Europeans are too smart to buy that story. Uh, you know, they're in Italy, but Italy is the first developed country to sign up to the Belt and Road Initiative with the current, uh, current, uh, nationalist, if you want to call it, populist government. Um, and I don't think Hungary is buying that story. Um, you know, so it's okay for for him to believe that, but, but I think he's mistaken. Like I said, they made the, the US made just as much money, if not more, than China. So, it's, it's the, they didn't, you, it's how the money was distributed inside those countries that was the problem. You can't blame the poli- the Chinese Politburo on how they divided up their money, their profits. The Chinese Politburo didn't have a say in that. And I think Europeans understand that, and I think most Americans would understand that too.
>> As you said, uh, uh, you, you raised hundreds of millions of people from poverty. But what makes you confident that actually your, the way that China is operating today won't hit a wall in 10, 15 years, especially when we look at the Chinese finances, the growth, debt, capital allocation, and everything that we are thinking about today? And actually, when looking at the socialist party and reforming the country, do you believe that China could do the same as Croatia did in the '90s to transition from socialism to democracy? It is something that would, uh, Chinese party do if they feel that this is best for Chinese people? Thank you.
>> Well, uh, it's interesting to hear your, uh, recounting of Croatian experience over the past half century or more. Um, you know, we had a similar experience. Um, we, in the first 30 years of the People's Republic, from 1949 to 1979, uh, we had a strict socialist system, five-year plans, central, central planned economy. Some people say it's a failure. I, I disagree. Uh, we built tremendous basic industrial infrastructure. In 1949, our life expectancy was 41 years old. I've already lived past that, okay? And in 1949, our literacy rate was less than 15%. And our child immunization rate was like below 1%. Electricity coverage only covered maybe, you know, less than 5% of the country, mostly in in top few cities. Okay. In 1949, we're much, much, much poorer than you. Much, much poorer. Um, and after 30 years of socialism, total socialism, what I mean, we made a lot of mistakes like the Great Leap Forward, Cultural Revolution, but the successes are are tremendous. In 1979, um, our life expectancy is already well in in the 60s. Our literacy rate was 85%, which means 100% of the of young people. Okay. Um, and and our immunization rate was 100%. Electricity coverage, China is a huge country, is above 80%. Okay. So I would argue without this socialist period, we would have never taken off after the Deng Xiaoping in the Deng Xiaoping era with market reforms. Um, you know, an interesting thing that people discovered was, um, when we started building these cities and building those, uh, highways, uh, in the last 40 years, Chinese migrant workers who came from the countryside, migrant workers who never finished, you know, just barely finished elementary school, could read an engineering drawing, how to build. So we had a highly educated population, even at a very low GDP per capita. In fact, if you, if you, uh, check the UNDP, United Nations Development Program, called Human Development Index in 1978, at a very, very low GDP per capita, China's Human Development Index was approaching those of developed countries. Okay. So, but we had that, yet our economy stalled. It, it couldn't go further. We had this. So, we changed, we reformed. We said, "Okay, we're going to keep what was good about socialism." Uh, we still continue the five-year plan, but in a different format. Obviously, it's not a totally command economy. And we brought in tremendous market elements, market characteristics. Um, pricing was allowed to be determined on the margin by market forces and gradually opened up market, um, and trade. Um, so, so that's those the last 40 years. In the next phase, in the next 30 years, uh, we faced a different set of challenges. Uh, we've grown tremendously, but our inequality has increased. Um, so that's that is on top of our political agenda. Uh, we're worried about productivity, yes, but we're more worried about sharing the prosperity. Uh, we don't want to leave people behind like the liberal globalists did in the rich countries. Uh, we don't want to do that. So, so the idea now, idea is to to eradicate absolute poverty. Uh, and we're well on our way. In the next four years, we have, I think, 30 million people left living beneath, uh, the absolute poverty line, defined by, uh, whether it was the World Bank or whatever the the organization is. Um, and and and we, in the next three, four years, we're going to take that to zero, to zero. Okay. Even rich countries cannot do that. And we're still a developing country, uh, at only $10,000, maybe $11,000 US dollars GDP income per capita. We're going to take our absolute people under absolute poverty line to zero in the next three, four years. Um, we need to expand our healthcare coverage. Uh, we need to redistribute the gains of the in the last 40 years from from economic, uh, uh, growth. So those are the priorities. Uh, and that's the new era. And and so I'm, I'm predicting a shift away, relatively away from capitalistic approaches to more socialism in China. So we, we've sworn from total socialism in the first 30 years to Deng Xiaoping's, you know, market reform and more, not capitalism, but capitalistic approaches. And I think in the next 30 years, we're shifting back a bit to have more socialism.
This video has examined a simple but often misunderstood reality of globalization. Over the past decades, globalization created enormous wealth across the world, but the results were radically different. In many Western countries, economic growth concentrated at the very top while middle-class income stagnated or declined. In contrast, China experienced rapid growth alongside broad-based improvements in living standards. This was not accidental. It reflected two fundamentally different approaches to how globalization is governed and who it ultimately serves. My argument is not that China rejected markets or wealth creation. China embraced globalization and market mechanisms, but decisively rejected globalism as an ideology. The key difference lies in the relationship between capital and political authority. In capitalist systems like the United States, capital operates as an independent power. Wealth can shape political outcomes and influence the direction of the state itself. In China, capital exists, entrepreneurs thrive, and wealth is generated, but capital remains subordinate to political authority. It is not allowed to determine the country's long-term direction. This distinction explains why globalization produced social backlash across much of the developed and developing world, yet delivered unprecedented poverty reduction and stability in China. Capital by nature has no loyalty to land, culture, or society. Left unchecked, it moves purely in search of profit. People everywhere, regardless of ideology, want their lives protected from being ruled solely by capital. China's model offered one answer to that dilemma by ensuring that political authority, not financial power, sets national priorities. The real question for the future is not which system will dominate, but what kind of globalization the world chooses next. Will globalization continue to serve only capital, or can it be reshaped to respect national sovereignty, social stability, and different development paths? That debate is no longer theoretical. It is already shaping global politics. And perhaps the most important question is this.